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Federal Realty (FRT) Down 2.6% Since Earnings Report: Can It Rebound?

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More than a month has gone by since the last earnings report for Federal Realty Investment Trust (FRT - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Federal Realty Beats Q2 FFO Estimates, Raises View

Federal Realty posted second-quarter 2017 FFO per share of $1.49, beating the Zacks Consensus Estimate of $1.46. The figure also came in higher than the prior-year quarter tally of $1.42.

Results were backed by growth in revenues. Also, the company raised its guidance for full-year 2017 and recently announced a hike in dividend.

Total revenue for the quarter grew 5.1% year over year to $208.0 million. In addition, the top line surpassed the Zacks Consensus Estimate of $207.0 million.

During the reported quarter, Federal Realty signed 111 lease deals for 432,164 square feet of retail space. As of Jun 30, 2017, the company’s overall portfolio was 94.5% leased, unchanged year over year.

Quarter in Details

On a comparable-space basis (spaces for which a former tenant was there), Federal Realty leased 397,555 square feet, at an average cash-basis contractual rent escalation of 13%. Rent increases (on a straight-line basis) for comparable retail space averaged 27% for second-quarter 2017.

Same-center property operating income (including redevelopments) improved 3.9% year over year. However, excluding such properties, same-center property operating income edged down 0.7%. As of Jun 30, 2017, Federal Realty’s same-center portfolio was 95.9% leased, unchanged year over year.

Federal Realty exited the second quarter with cash and cash equivalents of approximately $96.3 million, up from $23.4 at the end of 2016.

Outlook 2017

For 2017, Federal Realty raised its FFO per share guidance to $5.86–$5.94 from the previous guidance of $5.85–$5.93.

Dividend Update

On Jul 31, 2017, Federal Realty announced a quarterly cash dividend of $1.00 per share, marking a hike of 2% from the prior dividend payout. Also, it marks the 50th consecutive year of common dividend increases by the company. The dividend will be paid on Oct 16 to shareholders on record as of Sep 22, 2017. Notably, the company’s compound annual growth rate of the dividend increases over the 50 years is above 7%.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.

VGM Scores

At this time, the stock has a subpar Growth Score of D, however its Momentum is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

While estimates have been moving upward, the magnitude of the revision is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.




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